State Tax Systems Vary Widely

The Editors | April 26, 2013, 1:42 p.m.
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The Senate approved a cloture motion Thursday night on an internet sales tax bill by a margin of 63 to 30. The bill (S 743) would allow states to require out-of-state retailers to collect sales taxes on items sold to their residents. A vote on final passage is expected after next week's recess.

The bill faces opposition from most Republicans, many of whom see the measure as a tax increase, but also from members of both parties who represent states with no general sales tax, including all five of the Democrats who voted against the cloture motion. Sen. Max Baucus of Montana, the Democratic chair of the Finance Committee, tried to prevent a vote, objecting to the fact that the bill bypassed his committee and was taken up directly on the floor.

The five states with no general sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) rely on a variety of revenue sources to fund their spending programs. Alaska gets a full 82 percent of its revenue from severance taxes on natural resources, while two-thirds of Oregon's revenue comes from individual income taxes, the most of any state. Every state has some form of selective sales tax on goods including motor fuels, alcohol and tobacco.

The states with the most to gain from the pending legislation are those depending heavily on sales taxes as a revenue source, such as Florida, South Dakota, Tennessee and Washington.

Read more at CQ.com: Senators End Blockade on Internet Tax Bill

About the Data

The data is based on the 2012 survey of state government tax collections conducted by the Census Bureau. Not shown on the map are license taxes, corporate income taxes and other miscellaneous taxes which together make up about 14 percent of state revenue.